Online cash loans are in essence, the devil, according to the money men who work for American banks. Their main gripe always seems to be related to APR. While this has been covered in other blogs, we have not yet uncovered the full extent of the banks’ hypocrisy. It’s claimed that the high APR on online cash loans place the customers in a bad financial situation. Banks also accuse instant cash loan companies of misleading customers about the amount of money to be repaid. Finally, banks accuse cash loan companies of introducing confusing information in their terms and conditions! Anyone who has ever dealt with a bank will find that highly amusing. Less funny is the fact that banks themselves are guilty of all of the above and here we explain why.

Again With APR!

Instant cash loan companies are pretty tired of hearing about high APR. Time and again, they emphasize the short-term nature of the loan and how APR is unimportant because the loans are paid off in a matter of weeks, if not days. The average American cash loan company may charge an APR of 450% but when this is calculated over 7-14 days, the repayment is far less than one would think. Besides, online cash loans carry a 20% default rate so these companies need to cover themselves somehow. Banks manage to issue credit card rates of 29.9% in some cases and woe betide anyone who is late on a payment!

Jargon

There is no doubt that failure to pay online cash loans back on time will lead to penalties but when you borrow the money, the company is very clear about the terms and conditions. All late fees are outlined so you already know the penalty for late repayments. Banks like to be mysterious and severe when it comes to overdraft fees. In fact, virtually every bank has a host of different fees and charges, most of which you’re not directly informed of. To know the full story, you would have to wade through pages of terms and conditions written in legal jargon. Banks are also less than specific about overdraft fees which can be incredibly high.

Banks And High APR

And these fees make a mockery of the banks’ protestation against the APR charged on instant cash loans. A $100 payday loan repaid over 14 days at the standard 450% APR will come to $17.50 interest. Compare this to banks and their exorbitant overdraft charges. The average American bank will charge customers and average of $34.65 every time they go into an overdraft on their account. If a customer pays back the outstanding credit on a $100 overdraft in 14 days, the APR charged by the bank is approximately 1,100%! And we thought that online cash loans had the highest APR!

As you can seen, banks are utterly shameless when it comes to the blame game. They chastise online cash loans and the companies that provide them while slowly and legally ripping off their customers. Financial institutions like banks have no right to hold the moral high ground when you consider their recent behavior.

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  3. What To Look For In An Online Cash Loans Company
  4. Instant Cash Loans: The Interest Rate Myth
  5. Why Instant Cash Loan Companies Are More Honest Than Banks